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Marcus Jennings, Fixed Income Strategist, Global Unconstrained Fixed Income, Schroders, explains why central banks are proceeding with caution when setting monetary policy.
Over the past month, several factors suggest that policymakers – particularly the US Federal Reserve (Fed) - should proceed with caution when setting monetary policy. In what's an unusual trend, hiring in the US labour market has remained weak despite robust economic growth.
Furthermore, the US government shutdown - which has halted the release of a number of key economic releases – adds uncertainty for the Fed and investors alike. Accordingly - and given our assessment that the path of the US and global economy has not changed materially - we make no changes to the probabilities...
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